Annual Leave Under UAE Labour Law: The Rules

An employee in the UAE private sector who has completed one year of service is entitled to 30 days of paid annual leave a year. That entitlement sits in Federal Decree-Law No. 33 of 2021 on the Regulation of Employment Relations, and it cannot be reduced by contract.

The 30 days are calendar days, not working days, which is the first thing that surprises people arriving from Europe or North America. The federal law applies to the onshore private sector in all seven emirates and to most free zones that do not have their own employment law. The Dubai International Financial Centre and Abu Dhabi Global Market run separate regimes with different numbers, and the federal and emirate-level public sectors have their own human resources laws. The detail below is the onshore private sector position.

How much annual leave does UAE labour law give you?

The statutory entitlement is 30 days of paid annual leave for each year of service once the employee has completed a full year. For an employee who has completed six months but not a full year, the entitlement is two working days for each month of service. Official government guidance describes part-year service generally as accruing at two days a month.

Part-time, temporary and flexible workers do not get the flat 30 days. Cabinet Resolution No. 1 of 2022, the implementing regulations to the Labour Law, sets a pro rata calculation based on actual hours worked converted into working days, with a floor of five working days a year. Employers running part-time contracts need to do that calculation rather than assume a fraction of 30.

Leave is a statutory floor. A contract or staff handbook can give more, and many do, particularly in professional services where 25 working days plus public holidays is common. A contract cannot give less. Any term that cuts across the statutory minimum is void as to the shortfall.

How does leave work in your first year of service?

Nothing special happens at the twelve month mark in terms of qualifying: leave accrues from the start, and the two days per month rule covers the period before a full year is completed. What changes at one year is that the entitlement becomes the full 30 days for each subsequent year of service.

Two practical points follow. First, an employee who resigns or is dismissed at, say, eight months is still owed payment for accrued untaken leave. Second, employers are free to allow leave to be taken before it has accrued, and many do, but if the employee then leaves early the employer will usually want to recover the advance from final dues. Whether it can do so depends on what the contract says, so the deduction needs a contractual basis.

Can unused annual leave be carried over or paid in cash?

Yes, within limits. Article 19 of Cabinet Resolution No. 1 of 2022 allows an employee to carry forward not more than half of the annual leave to the following year, or to agree with the employer to take a cash allowance instead, calculated on the wage the employee was receiving when the leave fell due.

There are two things to watch here:

• Carry-over is capped at half the entitlement, so an employee cannot bank several untouched years and expect to cash them all in later.
• Encashment during employment needs the employer to agree. An employee cannot simply decline to take leave and demand money.

The law also stops employers from sitting on the problem. An employer cannot prevent an employee from taking accrued leave for more than two consecutive years, unless the employee chooses to carry it over or to take cash compensation under the employer’s own rules.

Who decides when leave is taken, and what about public holidays?

The employer sets the dates, according to the needs of the business, and must tell the employee in advance. Official guidance states that the employee should be notified of the leave dates at least one month before the leave starts. In practice most employers operate an approval system, which is fine so long as leave is not refused to the point that the employee cannot take it.

Public holidays are separate from annual leave, and are set each year by Cabinet decision. Several of them move with the Hijri calendar and are confirmed close to the date, which is why holiday dates are announced rather than fixed in advance. Where a public holiday falls inside a period of annual leave, official guidance treats it as part of the annual leave unless the contract or company policy is more generous. Employers that want to give the day back should say so in writing.

What happens to unused leave when employment ends?

On termination, for whatever reason, the employee is paid for accrued untaken annual leave, including leave for the fraction of the final year worked. This is not discretionary and it does not depend on who ended the contract.

The payment is calculated on basic wage, not total package. That is the single most common source of argument in final settlement disputes, because an employee looking at a salary made up of a small basic and large housing and transport allowances will expect the larger figure. The end of service gratuity is calculated on basic wage too, so the same point bites twice.

Leave pay owed on termination cannot be signed away in advance. A settlement agreement reached at the end of employment is a different matter, but a clause in the original contract purporting to waive accrued leave will not hold.

Do DIFC, ADGM and the public sector follow the same rules?

No. The numbers are different and so is the mechanism.

• DIFC. Under DIFC Employment Law No. 2 of 2019, the entitlement is 20 working days a year, accruing from day one and available once the employee has been employed for 90 days. Carry-over is limited to five days, and cash in lieu is generally only available on termination.
• ADGM. The ADGM Employment Regulations 2024 came into force on 1 April 2025 and set their own vacation leave and carry-over rules, including an agreed carry-over arrangement with a minimum number of days that must be allowed to roll forward.
• Other free zones. Zones such as JAFZA, DMCC and the Dubai free zone authorities generally apply the federal Labour Law, with the zone authority handling permits and registration. Check the zone’s own employment rules before assuming.
• Public sector. Federal government employees and employees of each emirate’s government are covered by separate human resources legislation, not by the Labour Law, and entitlements are usually more generous.

Where do employers and employees get caught out?

The recurring problems are administrative rather than legal. Employers that do not keep a proper leave ledger cannot prove what was taken when a claim is filed, and the Ministry of Human Resources and Emiratisation will tend to work from the employee’s version where the records are thin. Employers that pay allowances as a large share of the package should expect arguments about the basic wage calculation, and should put the calculation basis in the contract.

On the employee side, the mistake is assuming that untaken leave simply accumulates. It does not, beyond the carry-over cap, and an employee who never takes leave may find that only part of it survives into the following year. If leave requests are being refused, put the request in writing and keep the refusal. That paper trail is what decides the dispute later.

Ministry fees for filing a labour complaint, and court fees if the matter goes further, are set by the relevant authority and change. Check the current schedule before budgeting for a claim.

This article is general information about UAE law as at September 2026 and is not legal advice. The position varies by emirate and by free zone, and it changes often. Take advice on your own facts before acting.

Legal Desire has published legal industry news and analysis since 2012. This article is part of our UAE desk, which tracks the laws, courts and regulators of the Emirates for lawyers and in-house teams.